TREASURY

Finance Bill Measures

Stephen Timms: I can today announce the implementation of a measure following consultation and two measures to protect revenues.
	Modernising tax relief for business expenditure on cars
	Following consultation, the Government published draft legislation on 8 December 2008 setting out proposals for new rules for tax relief for business expenditure on cars. With effect from April, the rate of relief will be determined by the car's CO2 emissions, rather than its cost. Associated rules governing the proportion of lease rental payments that may be deducted for tax, where businesses hire or lease their cars rather than buying them, are being similarly amended. I can confirm that this measure will be going ahead with effect from today for businesses in the charge to corporation tax and from 6 April for businesses within the charge to income tax. However, following comments received on the published draft legislation a number of changes to it are proposed. These, together with anti-avoidance provisions, are set out in revised legislation published on the HMRC website today.
	Avoidance using life insurance policies
	Schemes designed to avoid income tax have been identified by HMRC. The schemes purport to create income tax loss relief from offshore life insurance policies that can be set against other taxable income. The Government do not accept that the schemes have the effect sought or that there are any circumstances in which income tax loss relief can arise on life policies. However, to put the position beyond any doubt, legislation will be introduced in the forthcoming Finance Bill that will prevent income tax loss relief from being available from transactions on offshore life policies.
	This change, effective from 6 April 2009, will ensure that claims cannot be made for income tax loss relief from offshore life insurance policies relating to the years 2009-10 onwards. Furthermore, it will ensure that tax deductions will not be allowed for the years 2009-10 onwards even if the loss related to a previous year.
	The change will also have effect from today to all new offshore life insurance policies. It will also apply to existing offshore policies which on or after today are wholly or partly assigned to the person claiming a deduction, become used as security for a debt, or are varied so as to increase the benefits secured.
	A copy of the draft legislation together with a draft explanatory statement will be published shortly on HMRC's website.
	Avoidance using artificially created employment losses
	The Government have become aware of a further artificial and aggressive avoidance scheme that seeks to abuse tax reliefs available for employment-related losses incurred by employees and former employees.
	This scheme relies on deliberate default during the course of a contrived employment. During the course of the employment, the employer will deliberately default in relation to one or more aspects of certain financial arrangements undertaken by the employer. Under the terms of the employment, this will trigger compensation payable by the employer. The employee will be contractually obliged to suffer all or part of the compensation payable by the employer in respect of the default and will then claim relief for this as a loss against other income.
	These arrangements are similar to the highly abusive avoidance scheme that the Government acted against with effect from 12 January 2009. The Government do not accept that any of these highly contrived arrangements have the effect that is sought, but will remove any doubt by introducing appropriate legislation in the Finance Bill 2009 to prevent loss relief being allowed where liabilities relating to an employment are incurred by employees and former employees with a main purpose of the avoidance of tax. This legislation will have effect from 12 January 2009.
	The legislation will not affect genuine cases where tax avoidance arrangements are not involved.
	Details are contained in a technical note; the note, the draft legislation relating to this announcement and the draft legislation relating to the earlier statement of 13 January 2009 are published on HMRC's website.

COMMUNITIES AND LOCAL GOVERNMENT

Empowerment Fund

Hazel Blears: Last July, through the Empowerment White Paper, I outlined my proposals to support 20 to 25 third sector organisations through the Empowerment Fund. Today, I am pleased to announce to the House the twenty one third sector organisations that will receive grants under the Empowerment Fund. The aim of the Empowerment Fund is to provide stable and strategic funding to third sector organisations with national reach and help deliver on key themes within the White Paper.
	The third sector organisations are:
	Community Voices and Leadership Theme
	Royal Association for Disability and Rehabilitation (RADAR)
	The Young Foundation
	Operation Black Vote
	YWCA
	Community and Social Media Theme
	Tenant Participation Advisory Service (TPAS)
	Media Trust
	Community Development Theme
	Community Matters
	Novas Scarman
	Workers Education Association
	Sheila McKechnie Foundation
	Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA)
	Social Enterprises
	School for Social Entrepreneurs
	Social Firms UK
	Community Involvement in Planning
	Centre for Sustainable Energy
	Environmental Law Foundation
	Carnegie
	Action for Market Towns
	Helping small organisations to work together
	Housing Associations' Charitable Trust (HACT)
	Oxfam
	Improving communication between citizens and councillors
	British Association of Settlements and Social Action Centres (Bassac)
	Urban Forum
	The Empowerment Fund will provide £9.25 million over three years paying grants of either £250,000 or £500,000. The security of a three year fund will help these organisations plan ahead with confidence and they will be expected to show how they make effective use of the financial assistance to expand their work.
	This approach was developed in consultation with the relevant policy holders within the Department of Communities and Local Government, other Government Departments, and the third sector.

DEFENCE

Porton Down Volunteers

Kevan Jones: In 2003 the Government commissioned, via the Medical Research Council, a large-scale and independent epidemiological study of the more than 19,000 UK service personnel who had taken part in human experiments at the Porton Down research establishment between 1939 and 1989. The study was completed in 2007, and the main findings on mortality and cancer incidence were published on 25 March by the British Medical Journal.
	The researchers found no significant difference in overall cancer risk between those personnel who took part in the tests and similar personnel who did not. General mortality was slightly higher among the Porton Down veterans than the controls, but was lower in both groups than in the population at large. The authors state that it is not possible to attribute the small excess mortality to chemical exposures at Porton Down.
	I welcome the publication of these findings, which fulfil the commitment made by this Government to investigate whether the long-term health of Porton Down veterans was degraded by their participation in the tests.

UK Gulf Veterans (Mortality Data)

Kevan Jones: As part of the Government's continuing commitment to investigate Gulf veterans' illnesses openly and honestly, data on the mortality of veterans of the 1990-91 Gulf conflict are published regularly. The most recent figures for the period 1 April 1991 to 31 December 2008 are published today as a National Statistic Notice on the Defence Analytical Services and Advice website.
	The data for Gulf veterans are compared to that of a control group known as the "Era cohort" consisting of armed forces personnel of a similar profile in terms of age, gender, service, regular/reservists status and rank, who were in service on 1 January 1991 but were not deployed to the Gulf. As in the previous release, the "Era" group has been adjusted for a small difference in the age-profile of those aged 40 years and over, to ensure appropriate comparisons.
	Key points to note in the data are:
	There have been 997 deaths among the Gulf veterans and 1,008 in the age-adjusted Era comparison group.
	The 997 deaths among Gulf veterans compare with approximately 1,609 deaths which would have been expected in a similar sized cohort taken from the general population of the UK with the same age and gender profile. This reflects the strong emphasis on fitness when recruiting and retaining service personnel.
	These statistics continue to confirm that UK veterans of the 1990-91 Gulf conflict do not suffer an excess of overall mortality compared with service personnel that did not deploy.
	The full notice can be viewed at: http://www.dasa.mod.uk

HEALTH

Integrated Care

Ben Bradshaw: Sixteen pilot sites that will test how best to bring health and social care services together in new ways to benefit patients are being announced today.
	The pilots have been designed to look beyond traditional health and social care boundaries to explore how services for patients and service users can be improved. They will then assess the benefits of different models of care and identify any best practice that could be used more widely. The pilots will be supported by £4 million funding from the Department of Health,
	Each site has developed a model of care to help respond to particular local health need in the community. The health issues being tackled in each pilot include dementia, care for older people, substance misuse, chronic obstructive pulmonary disease (COPD) and end of life care. The models of care involved vary widely; they include: partnerships, new systems and care pathways that span primary, community, secondary and social care.
	The pilot sites are:
	Bournemouth and Poole Teaching Primary Care Trust
	Cambridge Assura Limited Liability Partnership
	Church View Medical Practice, Sunderland
	NHS Cumbria
	Durham Dales Integrated Care Organisation
	Nene Commissioning Community Interest Company
	Newcastle Hospitals NHS Foundation Trust
	Cornwall and Isles of Scilly Primary Care Trust
	NHS Norfolk and Norfolk County Council
	Northumbria Healthcare NHS Foundation Trust
	North Cornwall Practice-Based Commissioning Group
	Principia—Partners in Health, Nottinghamshire
	NHS Tameside and Glossop
	Torbay Care Trust
	Tower Hamlets Primary Care Trust
	Wakefield Integrated Substance Misuse Service
	The pilots start today and will run for two years. They will be evaluated over three years against a set of national and local measures, including impact on health outcomes, improved quality of care, service user satisfaction, and effective relationships and systems.

Drug Tariff

Phil Hope: As hon. Members will be aware, the Department has been carrying out a review of the arrangements under part IX of the Drug Tariff for the provision of stoma and urology appliances, and related services, in primary care. This is to advise the House of the outcome of the review.
	Throughout phase 2, the Department's key aims have been to:
	maintain and, where applicable, improve patient care;
	ensure equitable payment to dispensing appliance contractors and pharmacy contractors for the provision of equivalent services; and
	achieve transparency between what is paid for services and what is reimbursed for items.
	The last consultation regarding the arrangements for the provision of stoma and urology appliances, and related services, in primary care closed in September 2008; a summary of the responses is available on the Department's website at: www.dh.gov.uk/en/Consultations/Responsestoconsultations/index.htm.
	Our proposals have been amended, taking into account consultation responses. An overview of the new arrangements has been placed in the Library. In summary, the new arrangements look to:
	define and standardise the services that both dispensing appliance contractors (DACs) and pharmacy contractors provide in the normal course of their business when dispensing Part IX A (catheter), part IX B and part IX C appliances. Essential services that must be provided include services such as a repeat prescription service, appropriate advice and a home delivery service—if the patient requests it. Advanced services, which DACs and pharmacy contractors may choose to provide, include stoma appliance customisation and appliance use reviews;
	require appliance contractors to operate within a similar clinical governance framework to pharmacy contractors;
	replace appliance contractor remuneration "on- cost" arrangements with fees and allowances, which will be laid out in the Drug Tariff;
	introduce a funding uplift mechanism for remuneration for part IX related services that is similar to arrangements in place within the community pharmacy contractual framework;
	apply a uniform reimbursement price reduction of 2 per cent. to the reimbursement prices of all items listed as of 31 March 2010 in the following sections of part IX of the Drug Tariff:
	Part IXA catheters: urinary and urethral
	all items listed in part IXB, which lists incontinence appliances; and
	all items listed in part IXC, which lists stoma appliances;
	allow manufacturers whose products have a combined net ingredient cost of less than £5.6 million a year to apply for an exemption from this reduction; and
	introduce a reimbursement price increase mechanism for appliances supplied six months after the new arrangements come into effect.
	To allow these new arrangements to be implemented, amendment regulations will be laid—and amendment directions made—at least six months before they come into force. Subject to this, the new arrangements will be implemented from 1 April 2010.
	In addition to the new arrangements, the Department has decided that there will be a 4.4 per cent. uniform increase on the current on-cost percentage paid to DACs for a six-month period from October 2009 to March 2010. The increase recognises that, as the reimbursement price increase mechanism has been suspended since April 2006, the on-cost that DACs currently receive by way of remuneration for service provision, which is linked to reimbursement, has only increased in-line with related volume increases over the same period.

Meningitis C Vaccine

Dawn Primarolo: On 27 February I advised the House of a recall of batches of a meningitis C vaccine, "Menjugate Kit", and said that I would provide a further statement when test results were available.
	I am pleased to confirm that the manufacturer, Novartis Vaccines and Diagnostics, has conducted sterility tests of all recalled batches and they have proved sterile. The Medicines and Healthcare products Regulatory Agency (MHRA) has also conducted its own independent tests which have confirmed the sterility of the vaccine.
	It was right, on the evidence at the time and in the interests of public health, that the recall of the "Menjugate Kit" vaccine was made, as a precautionary measure. The results of these tests are reassuring, and confirm that the vaccine used in the UK was not contaminated.
	The UK has a successful immunisation programme that protects children from serious disease. Parents should continue to have confidence in getting their children vaccinated against serious illnesses.

HOME DEPARTMENT

Race Relations

Phil Woolas: I have made an authorisation under section 19D of the Race Relations Act 1976, as amended, to enable the Secretary of State to request that asylum applicants claiming to be a Somali national submit to language analysis.
	This authorisation replaces the Race Relations (Immigration and Asylum) (Language Analysis) Authorisation 2008 (5 June to 4 April 2009), which will expire on the latter date.
	Language analysis carried out in 2008 for some Somali asylum applicants demonstrated that significant proportions of those tested had claimed to be of a nationality, or from a region or grouping, that was not their own in order to try to gain residence in this country. This authorisation will assist the Secretary of State to make decisions in individual cases, and to ascertain the extent of this abuse. It will also assist in deterring such asylum claims.
	The Secretary of State may take a refusal to submit to testing into account when determining whether an applicant has assisted in establishing the facts of his case or her case.
	The authorisation will remain in place for 12 months (until April 2010), at which point we will review whether it is still necessary and appropriate.
	I am placing copies of the authorisation in the Libraries of both Houses of Parliament.

UK Border Agency

Phil Woolas: The UK Border Agency, which was established as a shadow executive agency in April 2008, will today begin to operate as a full executive agency of the Home Office. I am also publishing the UK Border Agency's Framework Agreement, which describes how the agency will be governed, and its business plan, which sets out the agency's objectives for the next three years. Copies of these documents have been made available in the Libraries of both Houses. The documents are also available on the Home Office website.
	The move to full executive agency status is an important milestone in the development of the agency. It establishes a clear accountability framework within which the chief executive will have greater operational freedom to focus on delivering the agency's services. At the same time, the framework agreement ensures that the agency will continue to work closely with the wider Home Office and its key delivery partners, including HM Revenue and Customs, the Foreign and Commonwealth Office and the police. Later this year we hope, subject to the passage of the Borders, Citizenship and Immigration Bill, to complete the formal transfer of customs functions and staff from HM Revenue and Customs to the agency.
	The agency will secure our borders and control migration for the benefit of our country and play a vital role in the Government's work to protect the public from crime and terrorism and to protect the tax revenues which pay for public services.

Visa Regimes

Phil Woolas: The Government are today announcing the dates of implementation of the visa regimes, announced in my right hon. Friend the Home Secretary's written statement to the House of 9 February 2009, Official Report, column 51WS. These tough new visa requirements will further strengthen the UK Border, while ensuring the UK continues to welcome genuine visitors.
	Visa regimes for Bolivian and Venezuelan nationals will begin on Monday 18 May 2009. Venezuelan nationals holding valid biometric, machine readable passports will be exempt from the visa requirement. At the same time we will clarify how the visa exemption for Taiwan passport holders works—that it only applies to those with full Taiwan passports.
	The temporary visa exemption for South African visitors with a previous travel history to the UK which began on 3 March will cease at midnight on 30 June 2009. From Wednesday 1 July 2009 all South African visitors to the UK will require a visa, as will visitors from Lesotho and Swaziland.
	The new visa requirements mean that nationals from these countries wishing to visit the UK for up to six months will need to obtain a visit visa, and provide their fingerprints, before they travel. Nationals of these countries seeking to travel via the UK en route to another country will also need a transit visa. This is in addition to the existing requirement for a visa in order to live, work, study or marry in the UK.
	All the new regimes will be implemented in line with the high standard of the UK's current visa operations.

INNOVATION, UNIVERSITIES AND SKILLS

Further Education Capital Programme

John Denham: In 1997 there was no capital budget for Further Education Colleges and the National Audit Office described FE college buildings as "ageing and their quality and fitness for purpose was often unsatisfactory, affecting the reputation of the sector".
	Between then and 2006-07, more than £2 billion has been invested in modernising FE facilities. My Department will spend another £2.3 billion in the current spending review period. We have been able to bring forward over £110 million of future investment in 2008-09 as part of the Government's response to boost the economy. Last summer the NAO reported the capital programme was making good progress with the renewal and modernisation of the FE estate with the great majority of projects coming in on budget and delivering improvements for learners.
	In December, the Learning and Skills Council, which runs the programme, decided to defer further approvals of schemes while assessing the programme overall. The LSC's assessment, which I reported to the House on 4 March 2009, Official Report, column 56WS, was that there were many more schemes in preparation than can be funded in this spending round. Before this assessment had been completed, I had agreed with the LSC in January to appoint Sir Andrew Foster to conduct an independent review of the LSC's handling of its capital programme and to make recommendations for the future.
	Sir Andrew's report is published today and copies have been placed in the Library of the House. I am also writing to all Members enclosing a copy of the report.
	Sir Andrew's report is very clear and he has gone through the issues with great care. My Department and the LSC will accept all of his recommendations. I also wish to record my thanks for the speed and efficiency with which he has conducted his review. His key finding is that "a good policy has been compromised by the manner of its implementation". He goes on to explain that "the policy intent to transform the FE estate is clear and positive. But the implementation approach did not include a robust financial strategy or a regional or national approach to prioritisation".
	Recognising the deficiencies in how the LSC has managed the programme, its former chief executive, Mark Haysom, resigned on Monday 23 March. Geoffrey Russell was appointed as acting chief executive on the same day. He said that his first task was to urgently increase the certainty and clarity around the capital funding programme.
	He has immediately appointed an external team from the firm Grant Thornton to review the financial data held by the LSC about capital projects to ensure, as Sir Andrew recommends, that "the process is grounded in fully accurate and detailed information about capital schemes in the pipeline".
	Mr Russell has appointed a director to be personally responsible for the capital programme, responding to Sir Andrew's conclusion that there was no clear overall responsibility for the capital programme within the LSC.
	Sir Andrew recommends that the priority is "to agree how the present demand-led approach to the programme is replaced by a needs-based approach with explicit priorities and choice criteria". The LSC is now consulting the sector on the approach which should be used in prioritising schemes. Sir Andrew also recommends that it will be essential to have early and open engagement with the sector in finding ways forward on the most pressing matters. The LSC has therefore established a reference panel of college principals convened by the Association of Colleges.
	Mr Russell is also appointing an external team of property specialists to assist the LSC as it begins shortly to meet with each college to ensure that the information held by the LSC is accurate and comprehensive and a sound basis for taking future decisions.
	While that work is going on, we have already made clear to all college principals that we will not allow any college to get into a situation where it cannot meet its financial obligations as a result of decisions taken by the LSC on the capital programme. The LSC monitors financial risk in colleges and there are well-established procedures for dealing with any college judged to be at risk. Any college that is concerned should speak to its local LSC who will work with the college to agree an appropriate financial plan.
	Finally, Sir Andrew's report also concludes that the scrutiny of the LSC capital programme by my Department was insufficiently rigorous. Many of my Department's objectives are achieved via arm's length bodies. It is vitally important that my Department is able to exercise proper scrutiny of their work. I have asked the permanent secretary to carry out a review of DIUS relationships with our non-departmental public bodies to ensure that there is clarity about accountability and responsibility.
	I will make a further statement to the House after the recess and report on the progress made in ensuring that the record investment we have made in FE continues to develop the skills of the nation.

JUSTICE

Probation Trusts

David Hanson: I wish to inform the House that from 1 April 2009, there will be established two further probation trusts operating in England and Wales: Greater Manchester and Lancashire. This brings to eight the total number of probation trusts.
	There remain 34 local probation boards that continue to operate in all other areas of England and Wales. These boards will, subject to satisfactory performance, have the opportunity to apply in 2009 to become probation trusts in April 2010. Voluntary mergers, initiated locally, will be supported by NOMS where they are more likely to meet the criteria for trust status.
	In accordance with sections 7, 8, and 10 of the Offender Management Act my right hon. Friend the Secretary of State for Justice has published a strategic and business plan for the National Offender Management Service for 2009-10, his annual plan for 2009-10.
	The trusts programme presents a challenge to probation boards to demonstrate that it can deliver locally tailored services efficiently and effectively. I am pleased that Lancashire and Greater Manchester have met this challenge and I am confident that more trusts will be created by 2010 and deliver significant benefits in reducing reoffending and protecting the public.